OrganiGram Shares Surge On Better-Than-Expected Q3 Sales, Upbeat Outlook

• Medical cannabis provider OrganiGram Holdings Inc OGI reported third-quarter FY21 sales growth of 12.65% year-on-year to $20.30 million, beating the consensus of $13.95 million.


• The revenue hike is primarily due to higher adult-use recreational net revenue and higher wholesale revenue.


• Adjusted gross margin fell to $(0.7) million loss, versus $4.11 million profit last year. Adjusted gross margin was -4% due to value offerings comprising a larger proportion of revenue in Q3 2021.


• Adjusted EBITDA decreased further by 376% Y/Y to a negative $10.2 million.


• Net loss narrowed by 96% Y/Y to ($4.0 million).


• Net cash used in operating activities was $10.75 million largely due to increase in working capital assets as it ramped up cultivation activities.


• Outlook: Organigram expects Q4 revenue to be higher than Q3 largely due to stronger forecasted market growth as COVID-19 restrictions lift.


• The company expects to see a sequential improvement in adjusted gross margins in Q4 2021.


• "We are pleased with the growth in revenue in Q3 as we were better staffed to fulfill the demand for our revitalized product portfolio, which continues to resonate well with consumers," said Chief Strategy Officer Paolo De Luca.


• Price action: OGI shares are trading higher by 12.0% at $2.96 on the last check Tuesday.

See also: HOW TO BUY ORGANIGRAM (OGI) STOCK